The module system among the self-employed is an option considered anomalous by the Tax Agency, but it has been with us for years. Self-employed people who have been using this system for years pay taxes without taking into account their real income.
But the time has come to stop swimming against the current, the deadline for the self-employed to request access to the objective estimation regime or the special cash VAT system by 2024 will generally begin on December 1.
The objective estimation regime or the well-known system of modules must disappear
To begin with, it is a system that has become outdated and, furthermore, it is unfair if we compare it with the rest of the self-employed.
The objective estimation regime allows self-employed workers to pay a single installment in INCOME based on some parameters such as the size of their premises or the contracted electrical power.
It is not relevant how much they earn each year, the taxes to pay are always the same.
Cash VAT and a system just as peculiar as that of the modules
In Spain, the cash criterion was launched on January 1, 2014, within the framework of other tax measures for SMEs and the self-employed.
However, that same year, Cristóbal Montoro, Minister of Finance, confessed that it had been a failure due to the difficulty of SMEs and the self-employed in applying it, especially those that carried out operations with large companies, since they could not deduct these operations until they they subscribed and decided not to do business with these companies.
Deadline for self-employed workers to opt or renounce the module regime and cash VAT
The deadline for the self-employed to request access to the objective estimation regime or the special cash VAT system by 2024 will generally begin on December 1.
In the particular case of the cash VAT regime, the access request, which would take effect from January 1, 2024, will be opened on December 1, unless the activity has just begun.
The Treasury will also open on December 1 the period to request the waiver of the modules or VAT based on cash criteria, in case the self-employed person is no longer interested in paying taxes in either of these two systems.
Many self-employed workers under the module system prefer to say goodbye
They have been trying to eliminate the module system for years, so many self-employed workers under this modality are likely not to wait for another extension because it does not compensate them.
Today, self-employed workers can access or remain in the module regime as long as they have not exceeded the threshold of 250,000 euros in 2023, in the case of self-employed workers who sell directly to individuals.
If they invoice companies, the threshold must not exceed 150,000 euros per year in 2023.
If these limits are not extended, the maximum would be 150,000 euros per year or 75,000 for self-employed workers who invoice companies directly.